I think that in all common Monopolies there are always going to be other competetitors that can either overtake you or just join your industry and drive your profits down. So, the other day I was trying to discover a TRUE Monopoly. One that has no substutites and no companies that could even know where to start to try and take over this industry. Then I was buying some food and I was looking at my change that I had just gotten and it slapped me in the face. Printing the American dollar. On the dollar it has a stamp on it that says it was printed by the Federal Reserve Bank of one of the 12 cities that the Federal Reserve Banks are stationed at. This company that started as a priviately owned company and the came a part of the governmental system when it had major people backing them up that had close ties with the government like the Rockefellers. The main reason for bringing the Federal Reserve System in was, as said in the Fedeal Reserve Act, "to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes." With all of the banking panics in the 1900's the government pretty much gave all the control to the Federal Reserve Banks. The banks have "last resort" loans that the government regulates and uses to try and stimulate the economy and control and regulate inflation. And apparantly right now it's not working so well for them.
But, this was the only TRUE monopoly that I could think of. If you have thought of others I would love to hear them.
-Elliott H
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I agree with Mr. Elliott Hardy that our government does run a monopoly. The Federal Reserve Bank is a government imposed monopoly, just like the paper that the currency is printed on is illegal to own in the United States. Also those damn communist IRS agents that collect our taxes which is also a government monopoly.
ReplyDeleteI think that before you make a judgement on what a TRUE monopoly is you have to consider the size of the market. For example, microsoft has a monopoly on the manufacturing of the windows operating system, as well as products like powerpoint, word, excel, etc. However, if consider the market for "computer operating systems", Microsoft definitely has competitors from Apple and Linux....so if you are saying that the Federal Reserve has a monopoly on monetary policy, that is true if you are only considering the United States....but internationally, numerous other countries in Europe and elsewhere also have centralized banking systems....It really depends on the size of the market you consider.
ReplyDeleteDavid S. Econ 200 at 8:00 Tuesdays and Thursdays